I've heard my butter start to crackle as it melts, but I've never had it arc. I looked around and couldn't find anything specifically related to that, but at SharpUSA.com it said that food residue can cause arcing. Possibly your butter splattered and caused this, or there was some other residue that caused it when you melted your butter?
Microwaves don't like very small amounts of food. If you're going to melt a small amount of butter, fill a bowl with water and run it with it. It won't sputter or arc.
Btw, 'low' on a microwave oven doesn't mean less heat/energy. Microwaves are only an on/off thing. Low just means that the microwave cycles on for a few seconds and then off for a few seconds. For those few seconds it is on, the butter can spurt just like on the high setting.